Why Oil Prices Are Low And Staying That Way

No one really cares about the price of oil - it's gasoline that drives consumer sentiment.

I think oil is suffering from the stuffed strip at the NYMEX, the supply glut, the lack of demand and the fact that Iran's entire production is off-line and it's having no affect whatsoever on the global markets. So now the supply cushion is known to be much more than was previously stated and it's going to be much harder, going forward, to panic prices higher when a 150Kbd Nigerian pipeline goes down for a few days.

Click for Chart	Current Session								Prior Day		Opt's
	Open	High	Low	Last	Time	Set	Chg	Vol	Set	Op Int
Nov'12	91.51	91.71	89.01	89.40	12:26 Oct 05	-	-2.31	176301	91.71	272776	Call Put
Dec'12	91.86	92.05	89.38	89.79	12:26 Oct 05	-	-2.28	52324	92.07	234265	Call Put
Jan'13	92.31	92.41	89.87	90.15	12:26 Oct 05	-	-2.33	17108	92.48	118905	Call Put
Feb'13	92.63	92.69	90.26	90.68	12:26 Oct 05	-	-2.22	11493	92.90	71538	Call Put

620M barrels on order in the front 3 months a LOT of open contracts, especially when you have this to look forward to:

Dec'14

90.24

90.30

89.05

89.05

12:26 Oct 05

-

-1.45

2291

90.50

91043

Call Put

Dec'15

88.50

88.50

87.00

87.00

12:18 Oct 05

-

-1.42

427

88.42

42319

Call Put

Disclosure: I am long USO. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

Additional disclosure: Positions as indicated but subject to change - we play oil in both directions, using the channel from $89.50 to $93.50 as a guide currently.